Gilead warned that those (generic versions) medicines have not been approved for use in the countries into which they are imported.

California-headquartered Gilead Sciences has warned against the use of generic versions of its blockbuster Hepatitis C drugs procured by patients directly through “buyers clubs.” A disruptive phenomenon, dozens of buyers clubs have mushroomed in recent years that enable supply of generic lifesaving medicines to thousands of patients afflicted with the fatal liver ailment.

In its latest May 9 regulatory filings in Form 10K at the US Securities Exchange Commission, Gilead said it is aware of the existence of various “buyers clubs” around the world, adding that through personal importation of such medicines, patients may be at risk of taking unapproved medications which may not be what they purport to be, may not have the potency they claim to have or may contain harmful substances.

Gilead warned that those (generic versions) medicines have not been approved for use in the countries into which they are imported.

“To the extent patients take unapproved generic versions of one or more of our medications and are injured or not cured by these products, our brand or the commercial or scientific reputation of our HCV products could be harmed,” it said in the filings made last week.

In the US, Gilead’s Hepatitis C treatment came with a listed price of USD 84000 and that has drawn wide criticism. According to news reports, Gilead has cited that the price level is comparable to the earlier treatment options. It also argued that the price to patients come with a significant discount.

Gilead’s official spokesperson told CNBC TV18, “With regard to buyers Clubs, the source and quality of Hepatitis C medicines secured through medical tourism and buyers’ clubs are unknown. Patients cannot be sure that they are receiving effective or safe medicine.”

The company avoided questions on whether it will launch an investigation into such supplies from any of its Indian partners.

As part of a 2014 agreement, Gilead, amid outcry from health activists on issues such as data privacy, had incorporated several safeguards like monitoring of medicine prescriptions for patients.

However, things seem to have moved as per plans with its Indian partners. Gilead expressed satisfaction with the progress made through its voluntary licensing arrangements for HCV (Hepatitis C virus) drugs with over a dozen drug makers that include Zydus Cadila, Cipla, Biocon, Hetero, Laurus, Strides Shasun and Natco, among others.

Gilead informed CNBC TV18 the voluntary licence partners have proven their ability to rapidly scale up the manufacture of high-quality, low-cost medicines and enable broad distribution to where the need is great. “As of the end of 2016, we estimate that 50 percent of patients living in developing countries being treated with one of Gilead’s Hepatitis C medicines, received or are receiving a licensed generic version,” the company said in its statement.

The arrangement with the Indian partners included supplies to over a hundred countries but clearly came with binding provisions to prevent supplies to developed markets like US and Europe, where the company directly markets its medicines.

Gilead revolutionized treatment of HCV through a range of single ingredient and combination therapies like Sovaldi and Harvoni nearly wiping out interferon-based treatments.

Apart from taking issue with buyers clubs, Gilead noted as part of its filings that third parties may illegally distribute and sell counterfeit versions of its products, which do not meet the rigorous quality standards of our manufacturing and supply chain.

“For example, in the first quarter of 2017, bottles of counterfeit drugs labelled under the Harvoni brand name were discovered at a retail pharmacy chain and pharmaceutical wholesalers in Japan,” Gilead said, adding it is taking steps to accelerate planned changes in packaging standards to make counterfeits more difficult.

James Freeman, Founder at FixHepC, a buyers club based in Australia, countered the claims made by Gilead about the safety issues. Freeman agreed that supply chain integrity is vital in ensuring patients received correct medicines. “As an additional safety check, we provide a tablet testing service using qNMR (Quantitative Nuclear Magnetic Resonance analysis). This is available to any patient who has sourced generic medications from any source. To date, none of the samples tested has been found deficient,” Freeman added.

Freeman, who came into spotlight for helping several Australian patients get Hep C medicines, said, "Looking at India specifically what the licence says is that the product is licensed to be sold within the territory - it is a point of sale licence, rather than an end-user licence of the type found in say arms sales."

"If an Indian doctor sees a patient by video conference, and writes in Indian script, and there is an Indian invoice, paid in India would that not be a sale in the licensed territory," Freeman countered.

Terming Gilead’s approach to market as “predatory pricing,” Freeman further clarified that he would accept that (what buyers club does) is a breach of the spirit of the law, it is not a breach of the letter of the law. Gilead uses one set of laws to price these medications at unaffordable prices. We use another set of laws to help provide affordable access….FixHepC uses the law to correct that problem, at least for those fortunate enough to be able to afford generic prices. It is an imperfect solution for an imperfect world.”